Lagos, Nigeria – The Nigerian Naira experienced a slight gain of N6 to close at N782/$ in the Investors and Exporters (I&E) window, the official market. This increase is attributed to improved liquidity and transaction activities observed at the official window on Wednesday.
In the previous trading session, the Naira had closed at N744/$, resulting in a N44/$ loss on Tuesday. However, it rebounded unexpectedly, showcasing the dynamic nature of the foreign exchange market.
Data from the FMDQ Exchange revealed that foreign exchange traders witnessed a surge in total transactions, reaching $90.52 million. This marks a notable increase of $22.42 million, a 32.9% rise compared to the $68.10 million worth of forex traded the previous day.
Meanwhile, in the Bureau De Change window, the Naira’s exchange rate against the United States Dollar was reported at N793/$1, according to Naira Rates, a black market aggregator. This figure signifies an increase from the average rate of N790.8/$1 observed in the preceding trading day.
Additionally, the British Pound demonstrated strength against the Naira, with an average rate of N1043.1/£1 compared to the previous day’s rate of N1034.6/£1.
Euro buyers in the black market also encountered a higher rate of N888.6/€1, up from N884.7/€1.
The Central Bank of Nigeria (CBN) recently implemented a policy that unified exchange rates into the I&E window, enabling market forces to determine the Naira’s exchange rate. This move aims to achieve exchange rate stability and allow the Naira to trade at the market-clearing rate.
The activation of the I&E window in June 2017 has played a significant role in the broader forex market, facilitating the trading of dollars sourced from autonomous sources among Authorized Dealers, Clients, and the CBN.
The unification of exchange rates in the I&E window is seen by stakeholders as a game-changer in the CBN’s efforts to attain exchange rate stability. This policy empowers forex dealers and investors to buy and sell dollars at their preferred exchange rate, provided they can find willing buyers, thereby promoting a market-driven approach to determine the Naira’s exchange rate.